In case if you are not able to pay all your bills in time and you do not deal with this situation in an appropriate manner, you can get into debts and this situation can quickly get out of your control. Something has to be done in time so that you may not end up bearing irreversible consequences. But there are so many actions that can be taken for reducing your debts as well as regaining control over your finances for good. Top 3 of these ways are discussed here.
- Switch to some credit card with zero percent balance transfer
Average rates of credit cards have seen a hike over the years and the figure has jumped up to beyond 18%. When you are paying the interest on your credit card, you should consider switching the balance to a deal with zero percent balance transfer. In case, if you happen to land one of the best deals out there, you would be able to get up to almost 28 months without interest.
- Use a personal loan for consolidating your debts
If money is being owed by you on an overdraft or credit card and there is high rate of interest associated to it, your best shot would be to get a personal loan with best possible rate. Personal loans often come with lower APR along with providing you with that certainty over monthly repayment, and period that will be taken for clearing off the debt. Most of the times, people tend to avoid consolidation loans. Most of them either have a higher rate of interest, spread the repayments across an excessively long time period or require your home as collateral for securing the loan. One should only consider consolidation loans if their cost is less compared to the borrowing arrangement you currently have.
- Plans for debt management
Plans for debt management are the agreements between the creditors and you for paying off all the debts. Regular payments are made to some licensed company that deals in debt management. This money is then shared out between the creditors. For going this route, you first need to setup your plan with some company that deals in debt management which is also authorized by FCA. The monthly payments are then worked out by the company. Here you will have to provide all your details regarding your financial status – like your debts, assets, creditors, and income. Finally, the creditors are contacted by the company and asked if they agree to their devised plan or not.